Scentre Group · ASX:SCG
Scentre — FY2023 Earnings Presentation
30 slides from Scentre's earnings presentation, Feb 21, 2024
Slide 1: ASX Announcement: Scentre Group reports 5.2% growth in full year FFO
ASX Announcement 21 February 2024 SCENTRE GROUP REPORTS 5.2% GROWTH IN FULL YEAR FUNDS FROM OPERATIONS Scentre Group (ASX: SCG) today released its results for the 12 months to 31 December 2023 with Funds From Operations (FFO) of $1,094.2 million (21.11 cents per security), up 5.2% on the previous ye
Slide 2: Announcement continued: developments, liquidity and outlook
At Westfield Tea Tree Plaza in Adelaide, the Group commenced a $27 million (SCG share: $13.5 million) redevelopment which will introduce JB Hi-Fi, an expanded Timezone and additional dining. We continue to progress works on our $4.0 billion pipeline of future retail development opportunities. The Gr
Slide 3: Full Year Results 2023
Full Year Results 2023 Westfield Doncaster, VIC
Slide 4: Overview
2023 NET OPERATING INCOME FUNDS FROM OPERATIONS DISTRIBUTION $1,951m $1,094m $861m OVERVIEW 1 +8.8% 21.11cps +5.2% 16.60cps +5.4% CUSTOMER VISITS WESTFIELD MEMBERSHIP2 42 destinations close to 20 million people, activated to attract more people 512m +6.7% 3.8m +0.6m BUSINESS PARTNER SALES An efficie
Slide 5: Full Year Overview
Full Year Overview Our strategy is to create the places and experiences that more people choose to come to, more often and for longer Customer Experience Projects Financial Highlights – Welcomed 512 million customers in 2023, up 32 – Successfully opened the final stage of the $355 million – Net Oper
Slide 6: Visitation
Visitation CUSTOMER VISITATION 32m NEW STRATEGIC PARTNERSHIPS +6.7% 512m Live Nation at Westfield Doncaster, VIC 480m Disney at Westfield Chatswood, NSW 2022 2023 Netball Australia and Westfield Eastgardens, NSW Full Year Results 2023 4
Slide 7: Business Partner Sales
Business Partner Sales TOTAL PORTFOLIO SALES (MAT $bn) $1.7bn 1 1 +6.4% $28.4bn For the 12 months to 31 December $26.7bn 2023 total sales were: $1.3bn − Up $1.7 billion or 6.4% on 2022 $25.0bn $0.9bn − Up $3.4 billion or 13.6% on 2019 − Excluding Cinemas and Travel, $1.8bn $22.0bn $22.1bn total sale
Slide 8: Leasing Activity
Leasing Activity LEASING DEALS AVERAGE SPECIALTY RENT ESCALATIONS AVERAGE SPECIALTY LEASE TERM 3,273 +7.5% 6.8 yrs 1,169 New Merchants, 307 New Brands CPI + 2% average 3,409 specialty rent escalations 3,273 PORTFOLIO OCCUPANCY AVERAGE SPECIALTY LEASING SPREAD 99.2% +3.1% 2,648 2,628 2,686 2,625 1,17
Slide 9: Gross Rent Cash Collections
Gross Rent Cash Collections Collected $2,723m, equivalent to 103% of gross billings GROSS RENT CASH COLLECTIONS $131m NET TRADE DEBTORS $62m 12 MONTHS TO 31 DEC 2023 AS AT 31 DEC 2023 $2,723m $2,592m $193m $186m $2,258m $2,058m $84m 74% $22m Dec-20 Dec-21 Dec-22 Dec-23 Dec-20 Dec-21 Dec-22 Dec-23 Fu
Slide 10: Scentre Group Portfolio
Scentre Group Portfolio $50.2 billion of assets under management (SCG share $34.3 billion) across 42 Westfield destinations1 42 Westfiedestinations in close proximity to 20 million people and situated on more than 670 hectares QLD 6 destinations of land $5.8bn SCG Investment 675,000m2 of retail GLA
Slide 11: Development Opportunities
Development Opportunities Westfield Albany, NZ Westfield Bondi Junction, NSW Westfield Booragoon, WA Westfield Sydney, NSW Westfield Doncaster, VIC Westfield Eastgardens, NSW Westfield Liverpool, NSW FUTURE DEVELOPMENTS >$4.0bn Westfield Parramatta, NSW Westfield Penrith, NSW Westfield Warringah, NS
Slide 12: We are a responsible and sustainable business
We are a responsible and sustainable business COMMUNITY TALENT ENVIRONMENT ECONOMIC PERFORMANCE INCREASED CUSTOMER ADVOCACY 91% EMPLOYEE ENGAGEMENT DOUBLED ROOFTOP SOLAR $1,094 MILLION FFO IMPLEMENTED KEY PARTNERSHIPS ON TRACK FOR 40:40:20 NEW ENERGY AGREEMENT GRESB GLOBAL SECTOR LEADER Increased Cu
Slide 13: Operating Profit and FFO
Operating Profit and FFO 12 months to 12 months to $m 31 Dec 2023 31 Dec 2022 Growth $ Growth % Property revenue 2,528.4 2,373.9 Property expenses (including expected credit charge) (577.7) (581.0) Net Operating Income 1,950.7 1,792.9 157.8 8.8% NET OPERATING INCOME 8.8% Management income 48.9 46.1
Slide 14: Financial Position
Financial Position $m 31 Dec 2023 31 Dec 2022 Total Balance Sheet Assets1 35,070.4 35,977.0 Borrowings2 (10,767.7) (9,941.9) Other (2,406.4) (2,850.1) Minority Interest (356.2) (544.8) Subordinated Notes3 (3,698.8) (4,109.6) Net Tangible Assets4 17,841.3 18,530.6 Net Tangible Assets4 – per security
Slide 15: Funding December 2023
Funding 31 December 2023 FUNDING INTEREST COVER LIQUIDITY 3.9x $3.5bn Borrowings $10.8bn Gearing 30.4% Weighted average facility maturity 3.5 years Subordinated notes $3.7bn Liquidity $3.5bn FFO TO DEBT INTEREST RATE HEDGED 12.9% 92% Weighted average interest rate1 5.6% 2 Interest rate exposure hedg
Slide 16: Funding
Funding Available liquidity of $3.5 billion, sufficient to cover all facility maturities until the end of 2025 FACILITY MATURITY PROFILE1 % A$bn Margin Senior Bonds AUD 2% 0.4 3.0 USD 23% 4.3 EUR 14% 2.5 2.5 GBP 4% 0.7 HKD 1% 0.1 2.0 Total 44% 8.0 1.5 Bank Facilities Drawn 18% 3.2 1.0 Undrawn 18% 3.
Slide 17: Interest Rate Hedging
Interest Rate Hedging1 HEDGE MATURITY PROFILE AND RATES $bn 14.0 2.65% 92% at 2.65% HEDGED AT JANUARY 2024 12.0 2.84% 80% at 2.84% 10.0 2.79% 8.0 92% 2.80% HEDGED AT DECEMBER 2024 6.0 Hedged 80% Hedged 60% 4.0 Hedged 44% 3.47% Hedged 2.0 21% Hedged 0.0 Jan-24 Dec-24 Dec-25 Dec-26 Dec-27 Interest Rat
Slide 18: Outlook
Outlook Subject to no material change in conditions, the Group expects: − Funds From Operations to be in the range of 21.75 to 22.25 cents per security for 2024, representing 3.0% to 5.4% growth for the year. − Distributions to be at least 17.20 cents per security for 2024, representing at least 3.6
Slide 19: Appendices
Appendices Westfield Sydney, NSW Image courtesy of Warner Bros. Australia
Slide 20: Developments: Westfield Sydney, NSW
Developments Westfield Sydney, NSW Highlights Overview Introducing a further 5 levels of luxury and high-end Project Cost $450m (SCG Share: $450m) retail, including the new Chanel boutique. Commencement 2024 Completion In stages from Q4 2024 Other brands to join the expanded Westfield Sydney Increme
Slide 21: Developments: Westfield Knox, VIC
Developments Westfield Knox, VIC Highlights Overview Stage 1: Completed in December 2022, introducing a Project Cost $355m (SCG Share: $177.5m) diverse mix of premium fashion and lifestyle brands, a Commencement 2022 new fresh food emporium, alongside new Woolworths Completion November 2023 and Aldi
Slide 22: Developments: Westfield Mt Gravatt, QLD
Developments Westfield Mt Gravatt, QLD Highlights Overview Introducing Uniqlo, Harris Scarfe, and a range of Project Cost $50m (SCG Share: $50m) specialty stores into the former David Jones space, Commencement 2023 including highly sought after fashion brands, and a Completion Q4 2024 new entertainm
Slide 23: Developments: Westfield Tea Tree Plaza, SA
Developments Westfield Tea Tree Plaza, SA Highlights Overview Introducing JB Hi-Fi and an expanded Timezone into Project Cost $27m (SCG Share: $13.5m) the former Myer level 1 space, enabling the Commencement 2023 introduction of additional specialty dining operators. Completion Q2 2024 Myer complete
Slide 24: Profit and FFO
Profit and FFO Statutory Profit FFO Financial Reconciliation from Profit to FFO 12 months to FFO 12 months to Statement $m 31 Dec 2023 Adjustments1 31 Dec 2023 Notes A B C=A+B 1. The Group’s measure of FFO is based upon the National Association of Real Property revenue2 2,460.3 68.1 2,528.4 Note 2(i
Slide 25: Operating Cash Flow
Operating Cash Flow Cash flows from operating activities - proportionate Equity 12 Months to 12 Months to $m Consolidated Accounted 31 Dec 2023 31 Dec 2022 Receipts in the course of operations (including GST) 2,897.3 292.9 3,190.2 3,128.2 Payments in the course of operations (including GST) (917.8)
Slide 26: Balance Sheet
Balance Sheet Balance Sheet – Proportionate1 Equity Debt 1. Period end AUD/NZD exchange rate 1.078 at 31 December 2023 $m Consolidated Accounted 31 Dec 2023 Reclassification 31 Dec 2023 2. Includes $174.0m of Property Linked Notes shown in minority interest given their equity characteristics, and $1
Slide 27: Business Partner Sales: Growth Over 2019
Business Partner Sales Growth Over 20191 Total sales were 13.6% higher for the 12 months to December Total Portfolio 12 Months to 6 Months to 3 Months to Sales by Category 31 Dec 2023 31 Dec 2023 31 Dec 2023 Specialty sales were 17.7% higher for the 12 months to December Fashion 15.6% 14.4% 13.4% Ma
Slide 28: Business Partner Sales: Growth Over 2022
Business Partner Sales Growth Over 20221 Total sales were 6.4% higher for the 12 months to December Total Portfolio 12 Months to 6 Months to 3 Months to Sales by Category 31 Dec 2023 31 Dec 2023 31 Dec 2023 Specialty sales were 4.8% higher for the 12 months to December Fashion 0.4% (2.3%) (1.5%) Maj
Slide 29: Property Valuations December 2023
Property Valuations 31 December 2023 AUSTRALIA (A$m) Ownership Book Value Retail Cap Rate Economic Yield AUSTRALIA (A$m) Ownership Book Value Retail Cap Rate Economic Yield Australian Capital Territory Victoria Belconnen 100% 770.0 6.25% 6.71% Airport West 50% 187.5 6.50% 7.50% Woden 50% 290.0 6.25%
Slide 30: Important Notice
Important Notice All amounts in Australian dollars unless otherwise specified. SCENTRE GROUP LIMITED ABN 66 001 671 496 The material in this release and presentation is for general information purposes only and is given in summary form. Information in this presentation is not SCENTRE MANAGEMENT LIMI